The US$ was sold off sharply today although it has since recovered from its lows, following conflicting observations from various Fed members. It was already under pressure in European trade, and accelerated lower on the back of earlier comments in a paper from SF Fed President John Williams’ who said that the Fed should consider setting higher inflation targets than the current 2%pa, which the market read as dovish and likely to keep rates low for longer, but then turned around after the NY Fed President, William Dudley, said that is possible to raise rates at the Sept 20-21 policy meeting, given the evidence of wage gains and a tighter labor market that could boost inflation. The Feds Lockhart also weighed in, saying that at least one, maybe two hikes are conceivable this year. In terms of major data, the July US CPI rose by 0.8% vs 0.9% exp y/y slightly below expectations, held down by the recent low oil price.
Today could see some action early when the NZ PPI, Unemployment and the Australian Q2 Wage Price Index are all due. After that it is a little thin on the ground in Europe, with the UK Unemployment/Claimant Count the main focus. This will then be followed by the main event of the day, the FOMC Minutes. These are likely to strike a reasonably cautious note, and given the recent soft data there is little reason to speculate on any imminent rate hike so the dollar could remain under some pressure. The Fed’s Bullard will also be speaking, who may also drop a hint as to what the thinking on future policy movements might be.
CURRENCIES
EURUSD: 1.1278
Res
1.1300
1.1325
1.1345
Sup
1.1245
1.1225
1.1200
USDJPY: 100.27
Res
100.50
100.65
101.00
Sup
100.00
99.55
99.00
GBPUSD: 1.3041
Res
1.3050
1.3095
1.3140
Sup
1.3005
1.2950
1.2900
USDCHF: 0.9620
Res
0.9645
0.9675
0.9705
Sup
0.9600
0.9585
0.9565
AUDUSD: 0.7696
Res
0.7705
0.7725
0.7750
Sup
0.7670
0.7650
0.7635
NZDUSD: 0.7274
Res
0.7285
0.7300
0.7315
Sup
0.7255
0.7230
0.7200
INDICES / COMMODITIES
S+P: 2177
Res
2184
2190
2200
Sup
2172
2166
2160
DJI: 18522
Res
18585
18620
18650
Sup
18505
18475
18415
ASX SPI: 5486
Res
5500
5516
5540
Sup
5478
5460
5440
GOLD: 1346
Res
1350
1358
1368
Sup
1340
1330
1320
SILVER: 19.80
Res
20.00
20.25
20.50
Sup
19.65
19.45
19.20
OIL (WTI): 46.41
Res
46.90
47.25
48.00
Sup
46.00
45.30
44.95
WTI Futures rose by another 1.7% today as investors continued to weigh the possibility that discussions between leading OPEC producers could help stabilise global oil prices. Further medium term gains look possible.
US stocks ended a little lower after the hawkish Fed comments.
Gold and Silver were volatile, also on the back of the Fed comments, but ended the day pretty much unchanged.
Indices/commodities
S&P Futures
2177
Resistance
Support
2205
Minor
2175
Session low
2200
Psychological
2172
Daily Tenkan/(38.2% of 2140/2190)
2195
Minor
2165
(50% of 2140/2190)
2190
15 August High – All Time High
2160
(23.6% of 2140/2190)
Session high
2141
2 August low /(23.6% of 1980/2190)
Bias
US Stocks took a breather today, easing back after the hawkish Fed comments from Bullard/Lockhart and the S+P will take its next direction from the FOMC Minutes, due later in the coming session. The dailies look slightly negative and any hint of an impending rate hike could see further losses, although on the other side of the coin, a dovish tone will see a resumption of the slow crawl to higher levels. I suspect a deeper correction is coming and prefer to sell into rallies.
24 Hour: Neutral
Medium Term: Mildly bearish
DJI Futures
18522
Resistance
Support
18750
Minor
18505
Session low
18700
Minor
18475
Minor
18650
Minor
18416/10
10 August low
18621
15 August -All Time High
18380
Daily Tenkan
18587
Session high
18270
Minor
Bias
Ditto S+PI prefer to sell a break below the 12 August low, at 18485, looking for a run towards 18350, possibly 18200. If wrong, the slow crawl higher looks set to continue
24 Hour: Neutral
Medium Term: Prefer to sell a downside break of support
ASX SPI
5486
Resistance
Support
5590
Minor
5474
Session low/200 HMA
5568
1 August high
5467/60
15 August low /12 August low
5548
2 August high
5429
(23.6% of 4970/5568)
5530
Minor
5408
3 August low
5512/16
15 August high /9 August high
5374
15 July low
Bias
While the short term momentum indicators are flat the dailies still look slightly negative, although while global stocks remain firm the ASX is not going to go down too far. A cautious stance is required although I still prefer to lean towards selling into strength.
24 Hour: Neutral
Medium Term: Mildly bearish
GOLD
1346
Resistance
Support
1375
11 July high
1335
15 August low
1367
2 August high
1329
8 August low
1364
5 August high
1320
Minor
1358
Session high
1310
21 July low
1350
Minor
1300
Rising trend support
Bias
Gold appears set to remain choppy as it did today, spiking up to 1358 before reversing equally quickly to 1340, with both moves coming care of conflicting comments from various Fed board members, before finishing up pretty much unchanged on the day. Today’s direction will depend on the outcome of the FOMC Minutes and the direction of the dollar but given the mixed outlook from the momentum indicators, further choppy trade looks likely.
24 Hour: Neutral
Medium Term: Mildly bearish
SILVER
19.80
Resistance
Support
20.77
2 August high
19.65/60
12 August low/8 August Low
20.50
Minor
19.40
Minor
20.35
Minor
19.21
21 July low/8 July low
20.25
12 August high
19.00
Minor
20.10
Session high
18.80
Minor
Bias
The daily momentum indicators still point lower so I still prefer to trade from the short side, looking to sell at 20.00+, while hoping for a run towards 19.00. Currently at 19.80 after reaching 20.10 on Tuesday, stops on any short positions should again be placed at around 20.25 or at break even for more conservative traders. The FOMC Minutes will provide the direction so wait for the outcome and go with the flow.
24 Hour: Prefer to sell rallies
Medium Term: Mildly bearish
OIL (WTI)
46.41
Resistance
Support
48.70
76.4% of 51.61/39.17
46.00
Minor
48.22
7 July high
45.30
Minor
48.00
Minor
45.00/44.90
(23.6% of 39.17/46.71)
47.25
Minor
44.30
15 August low
46.84/90
61.8% of 51.61/39.17 //12 July high
43.80
(38.2% of 39.17/46.71)
Bias
WTI again headed strongly higher today on the back of speculation that OPEC may finally be able to reach some sort of agreement to stabilise prices. As before, the medium term outlook points to further gains although the 1 hour charts are building some bearish divergence and with the 4 hour indicators now being very overbought, I suspect a correction is not too far away. If so, look for levels to buy dips, hoping for an eventual continuation of the uptrend. Note that the EIA Crude Oil Stocks Weekly Change is due today
24 Hour: Prefer to buy dips
Medium Term: Mildly bullish
EURUSD: 1.1278
Resistance
Support
1.1400
Minor
1.1245
Minor
1.1380
Minor
1.1225
(23.6% of 1.0910/1.1322)
1.1345
(61.8% of 1.1616/1.0910)
1.1200
Minor
1.1322
Session high
1.1165
(38.2% of 1.0910/1.1322)
1.1300
Minor
1.1150
200 HMA
Bias
The Euro broke up to a high of 1.1322 in early US trade, driven by general dollar weakness, following on from comments from the Feds Williams, only to turn around after some hawkish remarks from other Fed members, Bullard and Lockhart. It will be another active one today as we get to see last month’s FOMC Minutes, which will largely provide the direction although no major surprise is expected, with a cautious tone likely to be the outcome. Technically, while the hourlies have become overbought, which may limit the short term upside momentum, the 4 hourlies and dailies do appear to be picking up a more positive outlook, so for the time being buying dips would seem to be the plan, but without looking for too much, as the choppy price action that has dominated over the last couple of months seems set to continue. A hawkish tone from the Minutes would most likely change that theory and see a quick reversal lower as the dollar returns to favour. Note that Bullard will be speaking again today.
24 Hour: Prefer to buy dips
Medium Term: Mildly bullish
Economic data highlights will include:
US Mortgage Approvals, EIA Crude Oil Stocks Weekly Change, FOMC .
Meta Trader – AxiTrader
EURUSD: 4 Hour
…
USDJPY: 100.27
Resistance
Support
102.27
12 August high ,
100.00
Psychological
102.00
Minor
99.53
Session low
101.41/44
(23.6% of 107.48/99.53) /15 August High
98.94
24 June low
101.00
Minor
98.50
Minor
100.65
Minor
98.00
Minor
Bias
US$Jpy headed back below 100.00 in US trade, triggering stops and heading to a low of 99.53 before a bounce to finish at current levels, just above 100.00. The daily momentum indicators still look heavy so a retest of the lows would seem possible, below which would target the 24 June low at 98.94. Expect increasing volume of complaint from the BOJ should we remain below 100.00, which will make for some choppy conditions. Selling rallies is preferred.
24 Hour: Neutral
Medium Term: Prefer to sell rallies/Mildly bearish
Meta Trader – AxiTrader
USDJPY: 4 Hour
…
GBPUSD: 1.3041
Resistance
Support
1.3200
Minor
1.3000
200 HMA
1.3175
5 Aug high
1.2950
100 HMA
1.3140
Daily Tenkan
1.2900
Minor
1.3093
10 August high
1.2875/65
Session low/15 August low
1.3050
Session high
1.2850
11 July low
Bias
Cable remains choppy as it continues to use 1.3000 as a pivot, today bouncing off its lows of 1.2875 after the dollar came under some pressure of its own and also assisted by the UK July CPI data which beat expectations (0.6%mm v 0.5% exp) . Look out for today’s Unemployment data (Exp 4.9%, Claimant Count 2.2%, Change; +10K) which will provide the direction ahead of the FOMC Minutes. Unless it paints a bleak picture Cable may remain fairly rangebound although the 4 hour and daily charts actually suggest that we might see a little more upside, so buying dips is mildly preferred.
24 Hour: Mildly bullish
Medium Term: Neutral
Economic data highlights will include:
Unemployment (June)
Meta Trader – AxiTrader
GBPUSD: 4 Hour
…
USDCHF: 0.9620
Resistance
Support
0.9758
15 August high
0.9600
Minor
0.9725
(38.2% of 0.9951/0.9588)
0.9588
Session low
0.9705
Minor
0.9565
(76.4% of 0.9443/0.9955)
0.9674
(23.6% of 0.9951/0.9588)
0.9545
Minor
0.9645
Minor
0.9521
23 June low
Bias
The dollar headed lower today, scything through the 0.9630/40 support with ease in heading down to a low of 0.9588. Little bounce has been seen and the 4 hour charts still point lower, although the dailies are yet to show any real momentum. If the FOMC Minutes are neutral/dovish we can expect the dollar to remain under pressure, so cautiously selling rallies is the preferred strategy, but keep stops tight as not overly confident given the hawkish comments from various Fed members today..
24 Hour: Prefer to sell rallies
Medium Term: Neutral
Economic data highlights will include:
ZEW Expectations
Meta Trader – AxiTrader
USDCHF: 4 Hour
…
AUDUSD: 0.7696
Resistance
Support
0.7800
Minor
0.7671
200 HMA
0.7773
22 April high
0.7653
Session low
0.7756/50
11 August/ descending trend resistance
0.7635/30
15 August low/38.2% of 0.7420/0.7756
0.9748
Session high
0.7621
10 August low/Daily Tenkan
0.7725
Minor
0.7610
(23.6% of 0.7144//0.7756)
Bias
The Aud broke higher in Asia yesterday, underpinned from some buying demand via Aud/Jpy, reaching a high of 0.7714 ahead of the London open and then continuing up to a high of 0.7748 before reversing after Bullard’s hawkish comments, to currently sit near 0.7700. It appears set to remain pretty choppy and the momentum indicators are offering little hint either way. I still prefer to sell into strength, but with a tight stop placed above the descending trend resistance at 0.7750.
24 Hour: Prefer to sell rallies
Medium Term: Neutral
Economic data highlights will include:
WBC Leading Indicator, Wage Price Index (Q2)
Meta Trader – AxiTrader
AUDUSD: 4 Hour
…
NZDUSD: 0.7274
Resistance
Support
0.7395
22 May high
0.7250
Minor
0.7360
(76.4% of 0.7744/0.6125)
0.7198
Session low
0.7339
11 August high
0.7165
15 August low
0.7315
Minor
0.7145
(50% of 0.6951/0.7339), Daily Kijun
0.7303
Session high
0.7100
(61.8% of 0.6951/0.7339)
Bias
As with the Aud, the Kiwi broke higher in Asia yesterday, underpinned from some buying demand via Nzd/Jpy, reaching a high of 0.7268 ahead of the London open and then making further gains in US trade by reaching 0.7303 before a minor reversal towards 0.7275. The New Zealand GDT price index came in at 12.7%, vs 6.6% in the previous reading, and did the Kiwi no harm. The 4 hour/daily momentum indicators do remain supportive but as I said previously, with further rate cuts likely in the months to come, I still prefer to look to sell into strength although this has not been easy recently. Any stops on short positions should be placed above the 10 August high of 0.7339. The NZ PPI and Q2 Unemployment are due shortly. (Exp 5.3%, Change; 0.6%, PR; 68.8%).
24 Hour: Prefer to sell rallies
Medium Term: Mildly bearish
Economic data highlights will include:
PPI, Unemployment
Meta Trader – AxiTrader
NZDUSD: 4 Hour
…
The post 17 Aug: US$ sold off sharply, ahead of a bounce, on Fed comments. FOMC Minutes ahead appeared first on FX Charts Daily.